Monday, November 1, 2010

Obama a Muslim

Wow. Who knew.

Monday, June 21, 2010

The China Effect

Stocks started the day on a very high note, but ended lower on the day. The worst performing group was retailers. Since most of their material comes from China and China will unpeg their currency to the dollar, there is concern that their costs will increase. However, on a bright note, the volume today was lower than Friday so this doesn't count as a distribution day, but keep in mind that options expiration was Friday. The DOW did manage to close above the 200 dma also.

A quick word on $BIDU. It has consolidated and is firing on all cylinders. If we see a new high with some volume it is worth looking at.

Tuesday, June 8, 2010

This crazy market

This market has been very crazy lately. Very erratic. The follow through day of Thursday has failed due to the fact that the Dow undercut the previous lows although the Dow did close up today in heavy volume. Also, the Nasdaq did have another distribution day.

Anyway, I've included a chart to illustrate today's emotional roller coaster.

Wednesday, April 28, 2010

Friday, April 23, 2010

Is Chase playing fair? They hung up on me!

Chase hung up on me! I was speaking to Debra about my account on 4/23/2010 at 6:23PM. I was not mean, I was just trying to understand why the balance subject to interest rate on my promotional APR rate was higher for the month of April than it was for the month of March although no new charges have been put on the card for months!

I have a promotional rate of 3.99% on the card as well as a promotional rate of 0.00% on the card. I have not used the card in months so there are no new charges that enter into the picture. I ALWAYS make more than the minimun payment so that isn't at issue either.

I first asked her, "How do you apply payments?". She replies, "First, we apply your payments toward fees and interest and then to the balance with the lowest APR.". I didn't stop her because my main issue was still how in the world does the balance on my 3.99% promotional go up when I am making above minimum payments.

On my statement due in April, the balance on my 3.99% portion is 10 cents higher than the balance on the March statement even after you add in the interest charges (we are dealing with small balances, but if they Chase cheats each customer out of 10 cents, they will make enough for the the CEO to get a good bonus this year). Debra was trying to tell me that this occurs because the balance used to calculate the balance subject to interest rate is done on an average daily balance basis and then she goes into some sort of song and dance about one month having 30 days and the other month having 31 days. A fifth grader can tell you that if we are averaging 2 numbers, your number should fall in between the two numbers you are averaging, not outside the range.

She kept referring me to the top of the billing statement to show me that they are applying to payments correctly and my total balance is coming down. I felt like she was reading a script because she wasn't processing anything I was saying. So, moving on, I said, "You told me earlier that you apply my payments to fees plus interest and then to the balance with the lowest APR." She replied, "That is correct." I said, "Well, according to the new credit card regulations you are suppose to apply any payment I make above the minimum payment to the balance with the highest APR." She then replies, "That is right, first we apply your payment to the fees plus interest and then any payment above the minimum to the balance with the highest APR." I said, "Well, that's not what you said about 5 minutes ago." She then repeated, "First we apply your payment to the fees plus interest and then any payment above the minimum to the balance with the highest APR." I asked again, so which one is it. Just five minutes ago, you told me it was the balance with the lowest APR. Let's go through this calculation together. When I walk through the calculation with her, I now find a $3.22 discrepancy. When I asked her about that, I got the response, "If you look at the top of your billing statement you will see the total of all your balances and the interest charged and your payments. I assure you your payments are being applied correctly!"

I then told her, I understand what is at the top of the statement, my issues are in the details. I am trying to figure out how to get the numbers are you are posting at the top of statement. I then asked her, "Am I the only customer that is having these problems, or are you getting other calls with folks who have the same issues?" At that point, she hung up me!

To be fair, in Chase's defense there is something on the statements they are not sharing with us because when I add to the balance used to calculate the interest rate, it's a few dollar short of the balance due even after adding the interest rates. I guess we need a little more transparancy here. I may forward this on to the credit card regulation people Senator Shelby told me to refer any of my issues to. I just have to find the letter. I'm pretty sure I scanned it into my Neat Receipts software.

Tuesday, April 20, 2010

E*Trade Options - Do Not Execute without notification

I'm going to have to rethink my relationship with E*Trade Securities. Back in the late 90s, I remember doing options trading with them. It was a Thursday before expiration Friday and Nike was coming out with their earnings report the very next day. I entered my options order very close to the end of the trading day. The options order was accepted and I received a confirmation. The very next morning AFTER Nike reported their earnings, the stock was set the jump. My phone rang. It was E*Trade. They were informing me that the Nike option I had bought did not go through. I told them, but you gave in a confirmation and the option is sitting in my account. I see it right here. They told me that a confirmation is not really a confirmation and the option wasn't mine. I then called my full service broker, I was using one of them at the time also, and told him about it. He said the whole thing sounded fishy to him also.

The market opened and I decided that since the security was in my account, I was going to sell it anyway, and I did. I also got a confirmation on the sell order. However, over that weekend, E*Trade backed out my sell and my buy orders so it was just like I never owned the position.

Now we fast forward over 10 years later. Until this time, anytime I've had an option in the money, the option has exercised. If I didn't have the funds to cover the exercise, I would get a courtesy call informing me of the exercise and giving me 2 options:
1) Wire money to fund the purchase
2) sell the position
3) One time, risk management simply closed my option position 15 minutes before the close without my instruction, but I was ok with that.
(By the way, Fidelity gives me the same options....)

Well, this weekend, I got alerts informing me of my options that expired out of the money, but I never got the alerts of the options that exercised. When I looked in my brokerage account today, I ask, where are my in the money options that expired.

I called E*Trade and was informed that since I didn't the funds to cover the exercise, E*Trade issued a 'do not exercise' instruction without alerts. The most messed up part about this is that I bought these options in the money which means they had instrinsic value, but I lose everything I put into them because of the 'do not exercise' instruction. So for now, I'm sour with E*Trade once again.

I first had a full service broker, that was charging enourmous fees, then I opened up a Fidelity account because they were a dicount broker. Later I opened up an E*Trade account because they offered $25 trades which was super cheap back then. However, now Fidelity offers $7.95 trades against E*Trades $9.95 trades (I'm a Power E*Trade customer, but I guess that doesn't mean squat!)

And then I remember the time, I had a put option on a particular stock that exercised. That put in me in a short position with the stock. E*Trade politely called me and said that had a put option that exercised and it put me in a short position with a stock. Since that particular stock wasn't shortable, I had to close out my short position immediately. Now, if at any time, E*Trade had the ability to do this 'do not exercise' instruction, it seems like that would have done it in that case and I would have been ok with it back then.

The whole 'do not execute' options sounds shady to me. I asked the representative, what if I had a put option on some stocks in my portfolio. If the put option expired in the money, could I ask for a 'do not execute' on the option. He said I could and I would get to keep my stocks!?!?!!! And then I wonder what happened to person I had my call options against. Were their stocks still called away from them and if so where did they go? Also, how do they determine which lucky person doesn't get their stocks called away from them if they write call options and that expire in the money?

Maybe this is all my fault. Back in 1996, I swore off the options market after losing my shirt, only to return 10 years later. I'm on the verge of swearing it off again. I have made intoxicating amounts of money in the options market and have turned around and lost intoxicating amounts of money in the options market.

One thing I remember from the good chat room on America Online about options:
With options, you can lose your shirt with no rags left, with options at least you have the rags.
With stocks time works with you, with options time works against you
With stocks if the stocks doesn't move much, you don't lose much, with options even if the stock moves your way, you can still lose everything.

Addendum: I just checked with 888-options and here is their take on my situation:
Q: In order to exercise a put or call, do I have to have cash or stock in my account to buy (in the case of a call) or sell (in the case of a put) the shares of stock that underlie the contract?

A: One way to answer your question is to ask yourself, "Which provides the highest price/lowest cost - exercising the rights of the option contract OR selling the contract back into the marketplace?"

If you exercise an option, the settlement will be in three business days, just like if you bought or sold stock on an exchange. So for example if you exercised a call and simultaneously sold the equivalent shares of stock, those transactions would offset each other. Assuming the option is in the money there should be no need to post margin for such a set of offsetting transactions. Of course, you will want to check with your brokerage firm to ensure that you are both on the same page regarding this practice.

Apparently, E*Trade is not on the same page in this case. However, in the past this has never been a problem. I guess it's a how they feel at the time situation. One thing is for sure, it will NEVER happen again! Fool me once, shame on you....Fool me twice shame on me!

Monday, April 19, 2010

Heading to Cash Hill

The warning signs were mounting:
  • Jim Cramer of CNBC was telling his listeners to go all in the market, because the market was going up and you didn't want to miss out --> Bearish sign
  • The market has been going straight up since March 9, 2009 --> A tired market
  • The news of Goldman Sachs being investigated for fraud (they were shorting the very securities, they were selling as grade AAA securities) --> A really scary sign
The bears have been out there for a long time and we all know even a broken clock tells the correct time twice a day (something the younger folks may not realize since they grew up in the digital clock days). Nevertheless, no good news came come out the Goldman Sachs story and I fear that the worse is yet to come. Remember, Goldman Sachs is the same company that was run by Treasury Secretary Hank Paulsen. There is no telling what will be found when the SEC of the United States and the Government of Germany (yes, they announced they are launching their investigation too) will find out when the covers are lifted. My father always taught me, what you do in the dark of the night, will eventually come to the light. Even on Jerry Springer you hear the phrase, "That's not what you said last night!"

I fear investors to stay invested in this market will suffer a loss while telling Cramer, "That's not what you said last night!".

What I find interesting this morning, are all the upgrades and downgrades coming from analyst on the day AFTER options expiry. I also found the $GS announcement interesting since it came the morning of options expiry. I always get irritated when news comes so close to options expiry. There are 30 days in most months and they always seem to choose to time their news around that 3rd Friday before the 3rd Saturday of each month. And then I learn that Goldman Sachs knew of the news months ago and failed to disclose the news the the shareholders. What other information have they withheld? I guess we shall find out soon. While Goldman Sachs may be able to buy off officials in the SEC, will they be able to do the same with the German government?

Nothing good can come of this situation, this is why I have decided to head to Cash Hill with the ole 401k. It's not about being older and subjecting myself to less risk, its about not riding the market down when there is a high probability that we are headed lower. In the year 2000, I was a member of the church of buy and hold. I suffered painful losses then. I vowed never again to just sit and ride. Now, you have an account that you are dollar cost averaging in, I can make a case for you to just ride it out; however, I would still consider moving a portion of your portfolio to cash, for still continue to dollar cost average into the declining market and pick up your shares on the cheap!

Tuesday, April 13, 2010

ABK. A heck of a crowded trade!

ABK has a perfect example of what is called a crowded trade. As ABK continued it's asent towards the promised land, more the more people couldn't resist the urge to get in fearing they would miss the big next move. Given the history of BAC, Fifth Third, AIG and a lot of other financial stocks that came from the abyss and back to the double digits, many traders/investors had this in their sites. Everything was going real good. ABK just reported actual earnings (although the profit was due to a one time tax benefit) and the stock was moving higher and moving fast. It was hard to resist getting on the bandwagon. As more and more traders bought the stock, pushing the stock higher, more and more retail investors starting buying it to. After all, this stock used to be a $100/share stock. If it only gets back to 10% of that value, you have a $10/share stock trading under $2/share.

Then JP Morgan decided to let it be known that this company is still on the verge of bankruptcy. I find it interesting that they waited this long to reveal this information. Usually, analysts make their recommendations and offer their opinions on stocks immediately after an earnings report not after the investors react to the earnings report. The timing is very suspect, but we know this. This is the market. This popped the bubble. Everyone was hitting the doors trying to get out as fast as they could and at any price. This is why the stock is dropping faster than a prom dress or going down like free beer. The same eagerness people used to get in, they are using to get out. Now we are at the point where the stock is broken.

I define as stock as broken as follows: We had a whole lot of volume this morning. I lot of people were buying the stock all the way from 2 up to and past 3.35/share. Many of those people are going to be in for a real shock when they check their stock this afternoon and find out they are down and down big. They will then turn on the 'I can't sell it now, it's down too much' coping mechanism. At this point, 2 things happen. 1) They just sit and wait it out in the house of pain hoping that one day the stock will come back up. Eventually, they may even sell the stock while it down low 2)If the stock does come back up, once they hit near break even or a lesser pain threshold, they will sell it preventing the stock from moving higher. I am speaking from experience, I have been in both situations!

I told a fellow tweeter last night that there were no fundamentals to base the stock on. When he asked for price target, I simply told him, I will ride the stock up until it starts to fall. So, I set my stops at a decent price. My stops executed and I was out. If I hadn't been at the dentist office, I'm sure I would have bought some put options and ride it back down.

Saturday, March 27, 2010

It's not about Health Care Reform

The Republicans know that the Health Care Reform bill is a great victory for Obama. A victory for Nancy 'stretch' Pelosi; which it is. A victory for Democrats; which it is and that is the only reason.

Do you want to deny kids health care? Do you want to give punishment for pre-existing conditions they way it's been? Do you want to deny families the opportunity to take care of their kids? You want to stop portability of heath care? You want to keep 32 million people from being insured. Sure there are problems with the bill, but no bill is perfect. But this is what the Republicans have stood in opposition to and they will have to pay for this at some time.

Friday, March 26, 2010

So Now You Get Mad! Health Care Reform

We had eight years of Bush and Cheney, now you get mad!
  • You didn't get mad when the Supreme Court stopped a legal recount and appointed a President.
  • You didn't get mad when Cheney allowed Energy company officials to dictate energy policy.
  • You didn't get mad when a covert CIA operative got ousted.
  • You didn't get mad when the Patriot Act got passed..
  • You didn't get mad when we illegally invaded a country that posed no threat to us.
  • You didn't get mad when we spent over 600 billion(and counting) on said illegal war.
  • You didn't get mad when over 10 billion dollars just disappeared in Iraq .
  • You didn't get mad when you found out we were torturing people.
  • You didn't get mad when the government was illegally wiretapping Americans.
  • You didn't get mad when we didn't catch Bin Laden.
  • You didn't get mad when you saw the horrible conditions at Walter Reed.
  • You didn't get mad when we let a major US city drown.
  • You didn't get mad when we gave a 900 billion tax break to the rich.
  • You didn't get mad when, using reconciliation; a trillion dollars of our tax dollars were redirected to insurance companies for Medicare Advantage which cost over 20 percent more for basically the same services that Medicare provides.
  • You didn't get mad when the deficit hit the trillion dollar mark, and our debt hit the thirteen trillion dollar mark.

You finally got mad when the government decided that people in America deserved the right to see a doctor if they are sick. Yes, illegal wars, lies, corruption, torture, stealing your tax dollars to make the rich richer, are all okay with you, but helping other Americans... oh hell no.

Tuesday, March 23, 2010

Health Care Reform

The say the devil is in the details. It is sad that it has taken this long for the United States to get to a point where they can even start to take action toward achieving affordable health care for it's citizens. I am proud that the Obama administration took a step toward achieving this accomplishment. However, I am saddened to see some of the results.

•A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. (This doesn't mean higher taxes! It will let us know the value of our health care. Most people have no idea how much health care actually costs. Back in 2007, when I left my last job, I discovered my employer was forking over $1,002 (minus my $350 contribution) a month for my coverage!)

•Elimination, after this year, of a deduction employers now take for providing Medicare Part D prescription drug coverage to their retirees to the extent that the federal government subsidizes the coverage. This will not take effect until 2013. (Once again we give the senior citizen's the shaft. I thought we were suppose to honor our elders)

•A ban on using funds from flexible spending accounts, health reimbursement arrangements or health savings accounts for the cost of over-the-counter medications, starting in 2011. (This one is just plain stupid!)

•A limit on the amount that employees can contribute to health care flexible spending accounts to $2,500 a year. Under the House package of changes, the cap won’t take effect until 2013. (This along with the current $5,000/year limit on dependent care expenses is crazy. Anyone with a child knows these limits are ridiculously low, but wait, now that over the counter medications can't be included and preventative care for doctors visits is not suppose to involve a co-pay any longer)

A hike in the 7.5% floor on itemized deductions for medical expenses to 10%, beginning in 2013. But taxpayers age 65 and over are exempt from the cutback through 2016. (Good Lord folks! If I make $35,000/year, I have to shell out over $3,500 before I start getting a tax benefit!)

A new 40% excise tax, beginning in 2013, on high-cost health plans, defined as those providing coverage in excess of $8,500 for individuals and $23,000 for families. The House’s package of modifications includes higher threshold amounts and an initial effective date of 2018. (I don't know what this means, but it doesn't look good. Please post a comment if you understand this for everyone's benefit. Thanks!)

The attorney generals from 13 states are frightening against the requirement that everyone obtains health insurance. It's the other parts of the bill they should be fighting against. My opinion is like this: If your state doesn't want to require it's citizens get health insurance, that's ok. However, those states will also lose their Medicare/Medicaid funding from the federal government as well as the public hospitals (which includes most hospitals).

When we start talking about Grandma's Medicare, then folks opinions on government sponsored health care changes.

Monday, March 8, 2010

My Chat with AT&T

Back in November, I called AT&T to disconnect my internet unless they could match the offer I got from the cable company. They said they would reduce my internet bill by half. When December came, I called back because I saw no discount. I was then told that the discount would go into effect in January. When January got here, I noticed a difference in my bill. In February, I noticed I was paying about the same as I was back in November. After doing some research, I discovered that they did indeed offer me the discounted internet service, but added on a $14.95 charge for a static IP address!!! I can use if I need a static IP address.
This prompted the following chat. Notice how I explicitly tell her that I'm trying to lower my monthly obligations and she is trying to push more services on me.

I am also posting this so that next month when I bill comes, if it doesn't match what she told me, I'll have the transcript ready and can point them to my blog.

----start of chat----
Thank you for choosing AT&T. A representative will be with you shortly.

You are now chatting with Ladrecka.

Curtis Frazier: Hello?

Ladrecka: Hello, How can I assist you

Curtis Frazier: I was reviewing my phone bill. I noticed I'm being charged 14.95 for static IP address for my DSL. How can I get that removed? I never requested nor do I need a staic ip address.

Ladrecka: In order to protect your private information, please provide me with a verification item from the list below.

* 3-digit customer code showing after your account number / telephone number
* Amount of your last payment or last bill amount

Curtis Frazier: xxx - $xx.xx

Ladrecka: I can remove the service, however, if you upgrade to Xtreme 6.0, it will be included and you can take advantage of a higher speed for an additional $5.00 per month. I can set this up for you.

Curtis Frazier: I just want the $14.95 charge for the static ip address removed. I'm trying to lower my bills and obligations.

Ladrecka: I noticed that you qualify for wireless service. I would like to recommend AT&T Nation(SM) with Rollover® Minutes, which will allow unused minutes to carry over from one month to the next. You can add it for $34.99 plus tax per month. This price includes unlimited mobile to mobile calling and 5000 night & weekend minutes, I can set this up today!

Curtis Frazier: No, I just want the $14.95 charge for the static ip address removed. I'm trying to lower my bills and obligations.

Ladrecka: Okay, per your request the Static IP feature has been removed from your account, is there anything else I can assist you with?

Curtis Frazier: Just to be sure, I will no longer be charged $14.95 for the static ip address? Can I get a credit for that amount since I never actually asked for it?

Ladrecka: You will automatically receive a credit on your next bill from the date the serivce was removed until the end of your billing cycle.

Curtis Frazier: But I never requested a static IP address and don't understand why I am charged for a service I never requested and never had a need for.

Ladrecka: Your overall bill reflects all services that you subscribe too, when you had the Xtreme 6.0 this feature was active and no request was made to remove the service.

Curtis Frazier: OK. I just want to be sure you aren't going to charge me more for DSL now since I got the static IP address removed.. right?

Ladrecka: Your DSL service monthly plan will remain the same, I just removed the Static IP service.

Curtis Frazier: But my Total AT&T Internet Service amount I pay should reflect the $14.95 reduction?

Ladrecka: Correct

Curtis Frazier: Also, why is my internet service more this month than it was last month?

Ladrecka: I'm sorry for the delay. I'll be right with you.

Curtis Frazier: In January it was $30.78, this month it is $32.90.

Ladrecka: You received more credits last month for the DSL service.

Curtis Frazier: Why?

Ladrecka: It looks like a discount was added to the account last month, you may have received over the amount intended. Give me just a moment to contact our DSL group.

Ladrecka: It appears that you called back on 12/22 to disconnect the Internet serivce and was offered a discount for 6 months.It was applied after December's bill was generated so, you received the discount for the month of January and a prorated discount amount for December both were applied to January's bill.

Curtis Frazier: OK. Thanks. So, can I expect next months internet bill to be around $17.95 ($32.90 - $14.95)?

Ladrecka: Correct

Curtis Frazier: OK. Thanks.

Ladrecka: Thank you for contacting AT&T. Please use the CLOSE button when you are ready to exit our chat session.

Sunday, March 7, 2010

Anniversay of rebound / Backbone of America supports CEO pay

March 9th will mark the one year anniversary of the stock market rebound. I remember back on March 9th, 2000, the forever rally of the 1990's came to an end and we encountered the worse market I had ever seen in my lifetime.

March 9th of 2009 market another major turning point in the markets with the largest rally we've seen this decade.

The question today is what will this March 9th bring knowing the all of our stimulus packages are set to expire in a few months. Will the Obama administration do another one of Bush's moves and grant us all stimulus checks again? It will be interesting to see what happens.

We will have high unemployment and a lot of people are suffering right now. Add to that the credit card companies are really squeezing American's with sky high interest rates. Some of which are above 30%. All of this in a time when America is in a recession.

The very companies that American's bailed out have turned around and hitting us hard to the higher interest rates. This is their way of saying "Thank you." Thank you for bailing us out and now I can get my nice plush bonus payments on top of my already nice salaries. Their companies were saved on the backbone on the American public.

Friday, January 29, 2010

Fake GDP numbers, Fake Consumer Sentiment numbers

And the market must have figured it out.

Today started off with a great GDP number. However, 2/3rd of the GDP number was due to inventory changes. If you look at the bond interest rate before the number was released and after the number was released, the interest rates didn't change. The pop the futures market was due to the strength in the dollar and nothing else. Then, later in the morning, the consumer sentiment number came out greater than expected.

Now let's examine this number. We know that for the last reporting period, the amount of money people spent on credit decreased for the first time in history! Now, how the heck is consumer sentiment going up when people's credit lines are being slashed and people are holding back on purchases. Add to that, gas prices increasing, and I'm sure most Americans have received their power bills and gas bills from last month and figuring out how to work those numbers in the old spending plan (i.e. budget). A clear example of how climate change can affect the economy, but we will save that argument for another day.

Starting in 1943 the Federal Government started tracking how much borrowing we do as consumers and from 1943 until now we have NEVER EVER cut back on the amount of debt we carry like we have in the most recent reporting period which is November 2009. We are getting healty piece by piece step by step in our own lives. Some of this is due to being forced to by a bank that has cut credit to us, but most is where you have made a decision not to live a debt based existence anymore. Americans of late have had debt of 126% to 138% of annual income! We have been carrying debt greater than what we make. Historically, Americans have carried 60% debt. However, we have doubled that amount.